Financial Crime World

Myanmar’s AML/CFT Compliance Under Scrutiny: Follow-Up Report 2023 Reveals Mixed Results

The Financial Action Task Force (FATF) has released its Follow-Up Report 2023 for Myanmar, assessing the country’s progress in implementing anti-money laundering and combating the financing of terrorism (AML/CFT) measures. The report evaluates Myanmar’s compliance with the FATF Recommendations, which set international standards for AML/CFT.

Strong Points

  • National Cooperation and Coordination: Myanmar scored well on its national cooperation and coordination, demonstrating effective communication and collaboration among government agencies.
  • Confiscation and Provisional Measures: The country also showed significant progress in implementing confiscation and provisional measures to prevent the misuse of funds.
  • Financial Intelligence Units: Myanmar’s financial intelligence units (FIUs) were evaluated as fully compliant, indicating their effectiveness in gathering and analyzing financial data.

Challenges

  • Risk Assessment and Risk-Based Approach: Myanmar was found to be non-compliant with its assessment of risk and application of a risk-based approach. This highlights the need for improved risk management practices.
  • Money Laundering Offence and Terrorist Financing Offence: While Myanmar scored largely compliant, there is still room for improvement in its money laundering offence and terrorist financing offence laws and regulations.

Partial Compliance

  • Customer Due Diligence: Myanmar’s customer due diligence (CDD) practices were deemed partially compliant, indicating that some improvements are needed to ensure effective CDD measures.
  • Record Keeping: The country’s record keeping practices also scored partially compliant, suggesting that there is still work to be done in this area.

Recommendations for Improvement

  • Targeted Financial Sanctions: Myanmar needs to improve its implementation of targeted financial sanctions related to terrorism and terrorist financing (R.6) and proliferation (R.7).
  • Transparency and Beneficial Ownership: The country must strengthen transparency and beneficial ownership practices, particularly with regard to legal persons and arrangements (R.24 and R.25).
  • International Cooperation on Mutual Legal Assistance: Myanmar should enhance its international cooperation on mutual legal assistance (R.37) to prevent the misuse of its financial system for illicit purposes.

Conclusion

While Myanmar has made progress in implementing AML/CFT measures, it still faces significant challenges in several areas. To meet the FATF’s standards and prevent the misuse of its financial system for illicit purposes, the country must continue to work towards strengthening its AML/CFT regime.